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Obama's Second Term

The Minority Strategy: A New Path for American Interests in the Middle East

July 14th 2014

Saudi princes

In the Middle East, the Arabs are king, sometimes quite literally. The term "Middle East" is a geographic label, broadly describing an area from the Moroccan shores to the Hindu Kush, but it is often referred to—erroneously—as the "Arab World" because of its politically dominant inhabitants. The advent of Islam was an Arab phenomenon and its holiest sites lie in the doyen of Arab puritanism—Saudi Arabia. Arabic is the region's lingua franca. All but five modern Middle Eastern states have Sunni Arab majorities, Sunni Islam being the dominant religious sect among the Arabs. A Middle Eastern minority is thus, by definition, one that is neither Sunni, nor Arab.

Consequently, ever since it bought out Great Britain as the region's dominant external power after World War II, America's principal diplomatic crusade has been to forge a lasting peace between Israel—the most powerful non-Sunni, non-Arab player in the region—and the Sunni Arabs. Read more ..


The Caliphate

Turkey: Between Iraq and Some Hard Choices

July 14th 2014

Turkish military parade with flags

After supporting the Islamic State of Iraq and the Levant (ISIL), an ultra-violent jihadist group which split with its al-Qaida sponsor after its leader was killed in Iraq and moved operations to Syria to fight the Assad regime, Turkey is now faced with dealing with an ISIL at least temporarily triumphant in northern and western Iraq as the result of a lightning offensive earlier in June which saw US-trained Iraqi forces melt away before its advance.

ISIL, whose leader Abu Bakr al-Bagjdadi has just announced the formation of a new Muslim Caliphate with himself as the "Caliph Abdullah", is in turn faced not only with resurgent Shiite Iraqi forces staging a counter-offensive with the help of Iran, Russia and the United States, but also flanked in the north by the Kurdish Regional Government (KRG) in Iraq and the Kurdish area of northeastern Syria; both regions now practically independent. Read more ..


Operation Protective Edge

Israel Holds the Line Against Hamas of Gaza

July 14th 2014

Click to select Image

The current confrontation in Gaza began July 12 after three Israeli teenagers disappeared in the West Bank the month before. Israel announced the disappearance June 13, shortly thereafter placing blame on Hamas for the kidnappings. On June 14, Hamas fired three rockets into the Hof Ashkelon region. This was followed by Israeli attacks on Palestinians in the Jerusalem region. On July 8, the Israelis announced Operation Protective Edge and began calling up reservists. Hamas launched a longer-range rocket at Tel Aviv. Israel then increased its airstrikes against targets in Gaza.

At this point, it would appear that Israel has deployed sufficient force to be ready to conduct an incursion into Gaza. However, Israel has not done so yet. The conflict has consisted of airstrikes and some special operations forces raids by Israel and rocket launches by Hamas against targets in Israel. Read more ..


Food Security

Monsanto Plants Seeds of Injustice in Paraguay

July 13th 2014

Monsanto, the American-based multinational chemical and agricultural biotechnology corporation, is the world’s leading producer of genetically modified (GM) seeds. Monsanto manufactures 90 percent of the world’s supply of GM seeds, and has moved to secure patent rights, further solidifying its monopoly on the product.

Many critics are deeply troubled by Monsanto’s attempts to secure the intellectual property rights to nature’s resources, which the corporation’s critics insist are endowed to all humanity. Monsanto’s efforts showed promise this past January when the U.S. Supreme Court upheld their ownership of genetically engineered seed patents. This decision legitimizes the company’s ability to sue American and Canadian farmers whose fields were unintentionally contaminated with Monsanto materials. The court’s decision is one of many instances in which Monsanto has displayed its sheer political grip—one that is choking the life out of local farmers in the United States, Canada, and Latin America. Read more ..


Geopolitical Edge

Why Moldova Should Matter to the U.S.

July 11th 2014

"NATO's Article 5 offers little protection against Vladimir Putin's Russia," Iulian Fota, Romania's presidential national security adviser, told me on a recent visit to Bucharest. "Article 5 protects Romania and other Eastern European countries against a military invasion. But it does not protect them against subversion," that is, intelligence activities, the running of criminal networks, the buying-up of banks and other strategic assets, and indirect control of media organs to undermine public opinion. Moreover, Article 5 does not protect Eastern Europe against reliance on Russian energy. Read more ..


Broken Government

GOP Should Stop Avoiding Payroll Tax Reform

July 10th 2014

IRS building

A consensus is emerging that reforming the federal tax code must be among the very top priorities of a new agenda focused on restoring growth and opportunity in the United States. This is an achievement in itself. For years, economists debated the merits of broadening the tax base and lowering rates, but that debate is now largely over. Every credible analysis now indicates that a serious tax reform plan would vastly expand the U.S. economy and provide more jobs and higher incomes for U.S. workers. The Joint Tax Committee's analysis of the ambitious individual and corporate tax reform plan introduced by House Ways and Means Committee Chairman Dave Camp confirms the large gains to growth and opportunity that the right kind of reform plan would provide.

The basic direction for reform is therefore clear: a tax system with lower rates, a broader base, fewer distortions in economic activity, and reduced barriers to business formation, job creation, and work. But, although there is broad agreement on the overall direction, there are still on-going debates over some important details--including how to help the middle class. Read more ..


Broken Government

New Bank Leak Shows How Rich Exploit Tax Haven Loopholes

July 9th 2014

Mel Gibson mug shot

The identities of thousands of wealthy offshore clients of a major Channel Isles private bank have been leaked to the International Consortium of Investigative Journalists.

The individuals include donors to the British government, which has been outspoken against tax havens, and some of the most prominent people in British life.

The ICIJ has exclusively allowed The Guardian newspaper to analyze more than 20,000 of the names, all of whom had dealings with a discreet Jersey, Channel Islands branch of Kleinwort Benson, a famous London firm which specializes in “wealth management.”

In the interests of transparency, ICIJ and The Guardian will publish some of their findings over the coming days, detailing the offshore links of political donors; international celebrities; judges; sportsmen; businessmen; and British aristocrats.

Names range from vacuum cleaner tycoon James Dyson to Hollywood actor Mel Gibson. Today The Guardian identifies party donors who over the years have paid more than £8m to the governing Conservative party.

One of the recipients of donations is Britain’s newly-promoted financial services minister, Andrea Leadsom, who has run into a “Cash for Office” allegation after she told The Guardian she was unaware of the size of large offshore  donations to the Conservatives made by her own  family.

The ICIJ has previously published secret internal records of offshore companies in the British Virgin Islands. ICIJ director, Gerard Ryle, said: “We make this information available not because what we found is illegal but because we think most people would think it unfair. Tax havens allow some people to play by different rules.”  Read more ..


America on Edge

America and the Inevitability of Foreign Entanglements

July 8th 2014

Click to select Image

The Fourth of July weekend gave me time to consider events in Iraq and Ukraine, U.S.-German relations and the Mexican borderland and immigration. I did so in the context of the founding of the United States, asking myself if America has strayed from the founders' intent with regard to foreign policy. Many people note Thomas Jefferson's warning that the United States should pursue "peace, commerce, and honest friendship with all nations -- entangling alliances with none," taking that as the defining strategy of the founders. I think it is better to say that was the defining wish of the founders but not one that they practiced to extremes.

As we know, U.S. President Barack Obama has said he wants to decrease U.S. entanglements in the world. Ironically, many on the right want to do the same. Read more ..


Broken Government

Obama 'One Step Behind' Illegal Immigrant Surge, says Texas Democrat

July 6th 2014

Obama pensive with flag

The Obama administration has botched its response to the wave of migrants flooding the southern border, a Texas Democrat charged Sunday.

Rep. Henry Cuellar (Texas), a Blue Dog Democrat who represents a border district, said the administration simply failed to anticipate a predictable crisis and remains "one step behind" in addressing it.

"We should have been ready for this surge, the administration should have been ready," Cuellar said on CNN's "State of the Union" program. "With all respect to the administration, they're one step behind. They should have seen this coming a long time ago … because we saw those numbers increasing."

In the month of May, law enforcers apprehended roughly 48,000 migrants along the Texas border alone, 9,700 of them children unaccompanied by an adult, Cuellar said. The wave has overwhelmed the law enforcers, courts, detention centers and healthcare agencies attempting to manage it. Read more ..


The Battle for Iraq

How Iran Could Help Iraq Fight ISIL

July 5th 2014

Iran's Revolutionary Guard

To help Iraqi Prime Minister Nuri al-Maliki’s government battle militants of the Islamic State in Iraq and the Levant (ISIL), Iran could potentially offer significant assistance through its powerful Islamic Revolutionary Guards Corps (IRGC), which reportedly has been active in Iraq during the past decade, analysts say.

What Can Iran Offer?
Afshon Ostovar, a Middle East analyst with the nonprofit Center for Naval Analyses (CNA), believes Iranian military assistance to Iraq would likely focus on several areas: advising, training, planning and coordination; information and intelligence; and supplying military materiel. "I suspect whatever assistance Iran provides at this time will be limited to these areas and kept mostly behind the scenes," Ostovar says.

Light Footprint
Geneva-based researcher Farzan Sabet says Iran is likely to deny any military involvement in Iraq, even in the face of credible reports. Sabet says Iran's preference for "a light footprint" has been confirmed on a number of occasions since its 1979 Islamic revolution. Read more ..


Broken Business

Giant Corporations, Giant Failures

July 4th 2014

Click to select Image

General Motors recently released the report it commissioned from the huge Jenner & Block law firm. The latter's chairman, Anton Valukas, investigated how and why GM failed - for over 10 years - to recall cars it produced while knowing they had defective ignition switches. The eventual recall of 2.6 million Chevrolet Cobalt cars in February, 2014, followed 13 deaths GM linked to those defective switches (many others were injured, and government officials believe there were more fatalities).

GM's chief executive, Mary Barra, admitted publicly this April what Valukas wrote in his report: GM failed systematically to identify, take responsibility for, and act properly in the face of life-threatening defects in millions of automobiles it sold since 2002. On June 16, 2014, GM recalled an additional 3.16 million defective vehicles across seven of its models. GM's total recalls in North America so far this year exceed 20 million vehicles.

Read more ..

The Caliphate

Understanding the Caliphate of Damascus

July 3rd 2014

Iraq ISIL pistol standoff

The Islamic State, previously known as the Islamic State in Iraq and the Levant, has changed its name, but otherwise the militant group remains the same. Over the past weekend, a spokesman for the group announced that it had established a caliphate stretching from Diyala province, Iraq, to Aleppo, Syria. The caliphate is a political institution that the Islamic State claims will govern the global Muslim community. "Iraq" and "Levant" have been dropped from the organization's name to reflect its new status.

The trouble with the announcement is that the Islamic State does not have a caliphate and probably never will. No amount of new monikers will change the fact that geography, political ideology and religious, cultural and ethnic differences will prevent the emergence of a singular polity capable of ruling the greater Middle East.

Read more ..

The Caliphate

The Sunni Ramadan Offensive and the Lessons of Tet

July 1st 2014

US Attack Helicopters

In February 1968, the North Vietnamese Army and the Viet Cong launched a general offensive in Vietnam during Tet, the Vietnamese New Year. From mid-1966 onward, the North Vietnamese had found themselves under increasing pressure from American and South Vietnamese forces. They were far from defeated, but they were weakening and the likelihood of their military victory was receding. The North Vietnamese decided to reverse the course of the war militarily and politically by marshaling available forces, retaining only limited reserves and going on the offensive throughout South Vietnam.

The attack had three strategic purposes. First, the North Vietnamese wanted to trigger a general uprising against the Americans and the South Vietnamese government. Second, they wanted to move the insurgency to the next stage by seizing and holding significant territory and resisting counterattack. And third, they wanted to destabilize their enemy psychologically by demonstrating that intelligence reports indicating their increasing weakness were wrong. They also wanted to impose casualties on the Americans at an unprecedented rate. The American metric in the war was the body count; increasing the body count dramatically would therefore create a crisis of confidence in the U.S. public and within the military and intelligence community. Read more ..


America on Edge

The Real War on Women

June 30th 2014

Brain Waves

In April, the “equal pay debate” was the opening salvo for politicians seeking women voters in the midterms. It set off a firestorm. The claim that women make 77 cents on the dollar compared to men was quickly countered with evidence that the wage gap is primarily driven by choices, not discrimination. Women earn 97 percent of what men earn when they hold the same jobs, work the same hours and have the same qualifications and experience, according to a study by June O’Neill.

But, of course, most women don’t. In this way, both sides missed the bigger issue facing women – why women continue to choose worse jobs with worse pay. Despite women’s astounding progress in the labor force, women are twice as likely as men to work part time. Women represent nearly two-thirds of workers (64 percent) earning the minimum wage or less. In 21st century America, women are disproportionately secretaries, maids, nurses and teachers, while the head honchos in business, finance, law, medicine, academia and government are still mostly men. (Consider that women represent only 4.8 percent of Fortune 1000 CEOs, even though they comprise half of all managerial positions). Read more ..


Broken Economy

How the Narrative About the Financial Crisis Affects Current and Future Housing Policy

June 28th 2014

Home Foreclosure

The narrative that came out of the financial crisis was that it could have been prevented by better regulation. If the regulators had been diligent enough to see the build-up of risk in the mortgage system—the large number of subprime and Alt-A loans—they could have stepped in, closed down the subprime lending process and saved us all a lot of losses. But Wall Street greed and risk-taking were allowed to run wild, causing a financial crisis. This is essentially the conclusion of the Financial Crisis Inquiry Commission (from which I dissented) and it is the basis for the reforms implemented by the Dodd-Frank Act in 2010. It is also a fantasy.

Yes, of course, if the regulators had been astute enough to see what was happening in the mortgage markets in 2005 and 2006, and understood that this was the beginning of an unprecedented collapse of housing and mortgage values, they could have acted. But with the exception of a handful of market players—like John Paulson—who made lucky speculative bets, no one knew the essential facts about the mortgage market and no one published a predicted decline in housing prices in the range of 30 to 40 percent. I dare say few if any of those who are reading this today can honestly say that they sold off all their housing and mortgage assets in 2005 or 2006 because they could see the disaster coming. Read more ..


War on Drugs

War on Narcoterrorists Sees Some Success in Mexico and Colombia

June 26th 2014

Burning bales of cannabis in Mexico

The Mexican drug war has been punctuated by police success in arresting high-profile narcotics traffickers. Last February, the arrest of elusive figure Joaquin El Chapo (Shorty), head of the powerful Sinaloa Cartel, made international headlines and heightened the morale of both Mexican and U.S. authorities. Nevertheless, for many Mexican citizens, there is significant doubt that El Chapo’s arrest will have a substantial detrimental impact on the operations of the Sinaloa cartel, or on the brimming inventory of other drug traffickers that continue to wreak havoc in Mexico. The organizations have proven to be a force as relentless as the mythological hydra; chop off the head, and two more grow back in its place. Read more ..


Economic Jihad

The Role of Antisemitism in the Presbyterian Church (USA)´s Decision to Support Divestment

June 25th 2014

Wailing Wall in Jerusalem

The Israel Palestine Mission Network (IPMN) of the Presbyterian Church (USA) (PCUSA) is a main advocate within the church on behalf of the boycott, divestment and sanctions campaign (BDS), whose goal is to delegitimize the State of Israel leading to that country’s dissolution. The Presbyterian Peace Fellowship is also an advocate for BDS.

Click here to read
the full report
.

Our report produces clear evidence of a strong undercurrent of overt anti-Jewish bigotry within the IPMN as expressed on the group’s Facebook page.

Numerous postings uploaded to this site by IPMN members over a period of two years demonstrate an ongoing pattern of expressions of antisemitism, including: Read more ..


Israel on Edge

Legalists to UN Head Moon: "Retract all Acceptance of PA to the UN"

June 24th 2014

UN HQ NYC

The Legal Forum for Israel, a body representing hundreds of lawyers and jurists from various countries, has sent a letter to UN Secretary General Ban Ki Moon last week demanding that he retract all acceptance within the UN of the Palestinian Authority and  reject the Palestinian request to accede to international conventions.

Relating to the abduction of the three boys form Gush Etzion, author of the letter Alan Baker, former legal adviser of Israel’s foreign ministry, former ambassador to Canada and Director of the International Action Division of the Legal Forum for Israel, writes: "We are, first and foremost, at the time of writing this letter, most distressed at the tragic situation in which one or more Palestinian terror groups, affiliated to what you and the UN regard as the “State of Palestine”, considered to be a non-member state observer in the UN, have taken three Israeli youths hostage, in clear violation of all basic humanitarian norms and conventions. Read more ..


Broken Government

A New Strategy for Corporate Tax Reform

June 22nd 2014

Congress-senate

Last Friday, Prime Minister Shinzo Abe of Japan proposed to cut the Japanese corporate tax rate from 36 percent to below 30 percent. This is the latest step on a journey that began on April 1st 2012 when the government set in motion a series of rate cuts - from 41 percent to 38 percent to today's 36 percent. In 2013, both major parties in Japan agreed to accelerate the timetable for the cuts. Today Japan may be ready to double down.

Over the last two years, Abe and the rest of the Japanese government have driven their corporate rate from the highest in the developed world towards the average for developed countries, which hovers around 25 percent.

These reforms are taking place despite Japan's crippling public debt and the aftermath of the Fukushima Daiichi nuclear disaster. Through creative policy-making - Japan has raised its national sales tax from 5 to 8 percent to replace revenue - and an eye towards making Japan a friendlier place for investment, the government has enacted a policy that will almost certainly strengthen Japan's economy. Read more ..


The Battle for Iraq

Jordan Could Be the Islamic State in Iraq and the Levant's Next Target

June 19th 2014

King Abdullah

The Islamic State in Iraq and the Levant, buoyed by its recent successes in Iraq, wants to expand its regional reach. Reports that Iraq has withdrawn forces from western towns close to its 180-kilometer (110-mile) border with Jordan have left Amman feeling vulnerable, and the Hashemite kingdom, certainly a target of interest for the jihadist movement, has deployed additional security personnel along the border.

However, taking on Jordan would be tough for the Islamic State in Iraq and the Levant. The group has the ability to stage terrorist attacks in the country, but significant constraints will prevent it from operating on the levels seen in Iraq and Syria.

The June 15 edition of the Jordan Times reported that Amman had beefed up security along its border with Iraq amid fears that the Islamic State in Iraq and the Levant is inching toward the kingdom. Quoting unnamed Islamist sources, the report added that the jihadist group had established a branch within the kingdom as part of its plans to create a regional emirate.

Read more ..

The Battle for Damascus

Next Stop for ISIL Jihadis: Jordan

June 19th 2014

The Islamic State in Iraq and the Levant, buoyed by its recent successes in Iraq, wants to expand its regional reach. Reports that Iraq has withdrawn forces from western towns close to its 180-kilometer (110-mile) border with Jordan have left Amman feeling vulnerable, and the Hashemite kingdom, certainly a target of interest for the jihadist movement, has deployed additional security personnel along the border.

However, taking on Jordan would be tough for the Islamic State in Iraq and the Levant. The group has the ability to stage terrorist attacks in the country, but significant constraints will prevent it from operating on the levels seen in Iraq and Syria. Read more ..


The US on Edge

Time to Challenge US Assumptions About Terrorism, Security, and Iraq

June 17th 2014

ISIL militants and flags

The fall of Mosul shocked Iraqis and Americans alike. In less than 48 hours, insurgents seized thousands of square miles of territory, hundreds of millions of dollars, and placed millions of people under their control.  The Iraqi army is in tatters, terrorists are on the march, and Iran is poised to intervene. Clearly, the U.S. withdrawal from Iraq has not brought the peace which the White House promised.

Historians will judge the wisdom of George W. Bush’s decision to invade Iraq and oust Saddam Hussein, but the situation Iraq currently faces was not inevitable. Rather than use the uprising as fodder for partisan mudslinging, the insurgent march through northern Iraq should be cause for reflection about core U.S. assumptions about terrorism, security, and Iraq itself: Read more ..


The Battle for Iraq

ISIS Rampages, the Middle East Shakes

June 16th 2014

Iraqi prisoners of ISIL

The jihadis' takeover of Mosul on June 9 won them control of Iraq's second-largest city, a major haul of weapons, $429 million in gold, and an open path to conquer Tikrit, Samarra, and perhaps the capital city of Baghdad. The Iraqi Kurds have seizedKirkuk. This is the most important event in the Middle East since the Arab upheavals began in 2010. Here's why:

Regional threat: The Islamic State in Iraq and Syria (ISIS), a designated terror group, is in a position to overthrow the governments of Iraq and Syria and perhaps beyond, starting with Jordan. Straddling the Iraq-Syria frontier, it may both erase the nearly century-old border between these two colonial creations and end their existence as unitary states, thereby overturning the Middle Eastern political order as it emerged from World War I. Rightly does the U.S. government call ISIS "a threat to the entire region. Read more ..


Inside Politics

Eric Cantor Was Defeated for Breaking One Old Rule and Two Newer Ones

June 14th 2014

Eric Cantor (R)

It’s not often that something almost universally unexpected happens in American politics. Frequent public opinion polls and a variety of political media usually give political junkies a good idea of what to expect next.

But not Tuesday, when House Majority Leader Eric Cantor was defeated in the Republican primary in the 7th congressional district of Virginia by Randolph-Macon College professor Dave Brat.

Cantor raised more than $5 million in campaign funds, Brat just over $200,000. But much of Cantor’s money was slated for House Republican colleagues, and Brat got vocal support — worth many times the amount he raised in a Republican primary — from talk show hosts Laura Ingraham and Mark Levin and columnist Ann Coulter.

It's tempting to classify this as a victory for the Tea Party movement over the Republican establishment. Cantor entered the race as the No. 2 member of the House Republican leadership, and Brat pursued some Tea Party themes (though without support from major Tea Party organizations), decrying the vast expansion of government not only under President Obama but also in the George W. Bush years.

But those are not the main lessons of this astonishing upset. One of those lessons is very old, an eternal maxim of politics. Another is familiar, a variation on a theme heard before. The third is relatively new, and perhaps points to a winning campaign theme for Republicans — or their opponents. The old lesson is: Show up. Voters like to see their elected representatives, even when they have ascended the ranks of committee and leadership positions in Washington. Read more ..


The Battle for Iraq

Deterioration of Iraq Threatens Security of the Mideast

June 12th 2014

Battles continue to rage across northern Iraq, pitting jihadist group the Islamic State in Iraq and the Levant against Iraqi security forces and their allies.

The growing reach of the Islamic State in Iraq and the Levant has escalated an already brutal campaign in Iraq. Alarmingly quick advances by the militants across an important region of the Middle East could draw in regional powers as well as the United States.

Analysis

Using hit-and-run tactics, the Islamic State in Iraq and the Levant, also known as ISIL, has sought to keep Iraqi security forces dispersed and under pressure. ISIL has achieved this by striking at areas where security forces are weak and withdrawing from areas where Baghdad has concentrated its combat power. Read more ..


The Environment on Edge

We Need a New Compromise to Break the Climate Negotiations Impasse

June 10th 2014

Smokestacks

As one who brings students to observe and report on the United Nations negotiations on climate change and who would like to see those negotiations succeed, it is easy to be discouraged at the snail’s pace of progress. The big promised outcome of “preventing dangerous climate change,” agreed to by 195 countries in the 1992 Framework Convention (UNFCCC), has not been met by any measure 22 years later. In the end, the UNFCCC is the only global group of nations that can make binding commitments to solve this problem.

Still, another approach is clearly needed. In our paper released in Nature Climate Change this week (and first released as a Brookings policy brief), Marco Grasso and I argue that we could take four steps to break the impasse.

1. A much smaller group of nations should strike a deal.  We propose that the “Major Economies Forum” (MEF), which with 13 economies is responsible for 81 percent of all global carbon dioxide emissions since 1990, would be an excellent forum for such negotiation. Other smaller groups like the G-7, G-20 or even the G-2 of the United States and China could make a deal, and by doing so could inspire action by many other countries that are waiting for these two to move. Read more ..


Broken Bookselling

Amazon Losing PR Battle With Hachette

June 9th 2014

Amazon box

The dispute between Amazon (NASDAQ:AMZN) and publisher Hachette has somehow grown into an epic saga pitting the forces of literary light against the dark lord of the Internet.
 
As if that wasn't bad enough for public relations, comedian Stephen Colbert, host of The Colbert Report on Comedy Central, is leading the army of the literary light. He literally gave the finger to Amazon on his show last week.

This army needs no weapons but words, and it's got a million of them. n purely financial terms, book publishing isn't a major industry, and Amazon diversified out of that niche a long time ago. Doesn't matter.

The controversy began when negotiations between Amazon and Hachette broke down. No one but the principals know why, but the general assumption is that Amazon demanded price concessions from Hachette, and Hachette refused. Read more ..


China on Edge

Without Drastic Changes, China Could Become Japan

June 9th 2014

Pollution Made in China

Front page news concerning Chinese economic weakness and accusations of large-scale cyber-espionage against the U.S. both involve the capacity to innovate. Cyber-stealing other people's knowledge, rather than developing it yourself, helps right away but discourages the innovation at home that can contribute to national wealth for the long term.

Vice-President Biden repeated last week that he believes China doesn't innovate, which is an oversimplification. It is true, though, that China still relies almost entirely on foreign technology. Becoming a truly innovative nation is the key to China eventually becoming a rich one, since its other sources of growth are slipping away. And at the moment, the outlook is dim.

The economy has been weakening and may continue to weaken. Natural resources are inadequate, the population is aging, and the country is starting to sink into debt. China in 2014? Yes, also Japan in 1994. The conclusion many observers drew then was that Japan had to sharply boost innovation to renew economic expansion. Unfortunately, it hasn't happened yet. Read more ..


The New Egypt

Egypt After the Election: Advancing the Strategic Relationship

June 8th 2014

2012 Egyptian Elections

Abdul Fattah al-Sisi's apparent victory in Egypt's presidential election this week marks the beginning of a new chapter for his country, though not necessarily the end of its political and economic turmoil. The past three years have not only left Egypt gripped by domestic troubles and economic malaise, they have also resulted in further deterioration of bilateral relations. Cairo has looked inward, immune to advice or influence, while Washington has looked on in bewilderment. Although American officials continue to describe relations with Egypt as "strategic," they have in fact become transactional, with one side trading its immediate needs for the other's: the United States needs a stable and cooperative Israeli-Egyptian relationship and preferential access to the Suez Canal, while Egypt needs military hardware and international recognition. Paradoxically, Egypt has had the upper hand in the relationship despite its troubles, mainly because it believes it can turn to others to meet its needs in the short run -- Russia for military equipment, the Persian Gulf states for aid, and the international community for validation. Washington, in contrast, has no geopolitical substitute for Egypt. Read more ..


The Environment on Edge

One Small Step (Cough) for Clean Air

June 7th 2014

Smokestacks

When the unlikely duo of Chief Justice John Roberts and Justice Ruth Bader Ginsburg and four other justices recently upheld the Environmental Protection Agency’s (EPA) authority to require states to control interstate air pollution, it marked a small victory for clean air.  The support from both liberal and conservative justices should also send a strong signal for needed bipartisan cooperation to remove three critical chokepoints that Congress built into the Clean Air Act 44-years ago.  The chokepoints shorten the life span of the average American by a half year and increase the costs that we will bear to control pollution, including the controls on greenhouse gases that are currently underway.

While the statute dates back to 1970, the litigation began in 2005 when President George W. Bush’s EPA mandated the states to control interstate pollution. A lower court sent this mandate back to the agency and President Barack Obama’s EPA issued a revised mandate in 2011. After a lower court struck it down, the Supreme Court upheld it, but the high court could not remove the remaining chokepoints that Congress built into the original statute. Read more ..


Israel on Edge

Australia Drops the Word 'Occupied' from References to Israeli settlements

June 5th 2014

Sydney Opera House

The Abbott government has ruled out using the term "occupied" when describing Israeli settlements in East Jerusalem, prompting suggestions about a shift in Australia's foreign policy.

The government on Thursday delivered a statement to clarify its stand on the controversial question of the legality of settlements after the issued flared up at a Senate hearing the night before.

The attorney general, George Brandis, on behalf of the minister for foreign affairs, Julie Bishop, said it was "unhelpful" to refer to historic events when describing these areas, given the ongoing Middle East peace process.

"The description of East Jerusalem as 'occupied' East Jerusalem is a term freighted with pejorative implications which is neither appropriate nor useful," Brandis told a Senate estimates hearing. Read more ..


EU on Edge

Ambiguous Results of European Parliamentary Elections

June 2nd 2014

Anti-establishment parties from both the left and the right won big in the 28-nation European Parliament elections that ended on May 25.

Riding a wave of voter discontent over the existing political order in Europe, the electoral victories—especially those by euro-skeptic politicians in major EU countries such as Britain, France and Germany—mark a clear turning point in the debate over the future of the European Union.

The surge of anti-EU parties represents an important blow to the legitimacy of plans by the European establishment to transform the continent into a United States of Europe. Read more ..


Broken Government

Highway Robbery on the High Seas

May 30th 2014

Cargo Ship

It's no secret that special interests regularly shape policy in Washington, costing taxpayers money and sacrificing honest policy debate to reward particular industries. The most recent example comes in the form of two objectionable provisions slipped into the Coast Guard and Maritime Transportation Act of 2014, recently passed by the House and now in committee in the Senate. The passage of this bill with these sections would not only divert scarce U.S. food-aid resources toward a handful of cargo-ship owners and away from the 2 million or so hungry people abroad, but would also foreclose future public debate on the issue.

Using food-aid funds to support the maritime industry is so ridiculous that Jon Stewart's "The Daily Show" satirized the idea this past fall. Yet the maritime industry seeks to take advantage of the fact that this bill routinely passes Congress with little attention, and often by a voice vote, by inserting two sections aimed at protecting their interests. Read more ..


The Nuclear Edge

Russia, China, and Iran: American Nuclear Nightmares

May 29th 2014

Fifty years ago, the CIA produced a Special National Intelligence Estimate (SNIE) on China's nuclear weapons program for President Lyndon Johnson. Overhead photography taken three weeks earlier revealed that a Chinese installation in Lop Nor was definitively a nuclear test site and would come online in two months. However, the CIA estimated, China would not have the necessary amount of fissionable material, which the United States assumed would come from a small plutonium reactor at Baotou, until mid-1965.

Seeking to make sense of the conflicting timelines, the CIA began to speculate: perhaps the Soviets had transferred additional fissionable material, perhaps the CIA was unaware of other enrichment sites, or, perhaps, as is often the case in large undertakings, progress among the different elements of China's nuclear program had merely become uneven. In conclusion, the SNIE reads, the available facts "do not permit a very confident estimate of the chances of a Chinese Communist nuclear detonation in the next few months. Clearly the possibility of such a detonation before the end of the year cannot be ruled out—the test may occur during this period. On balance, however, we believe that it will not occur until sometime after the end of 1964." Seven weeks later, China tested its first nuclear bomb on October 16, 1964, a highly enriched uranium implosion device. Read more ..


Afghanistan on Edge

5 Myths About US Troops in Afghanistan

May 28th 2014

US 10 MT departing

Troops don’t matter. The Afghan “surge” didn’t work so there’s no reason to keep many US troops there. The Afghan “surge” actually did work—as far as it was allowed to. Although violence levels remained high (unlike in Iraq, where they plummeted), the partial surge President Obama authorized in 2009 took back Helmand and Kandahar Provinces from Taliban domination. Afghan troops have held on to most of the key gains in that critical area with much more limited assistance. But Obama called the surge home before it could shift to the east, as was planned and required. The Afghan surge demonstrated quite clearly how important US troops can be.

Al Qaeda is “on the ropes.” No, it just isn’t. Al Qaeda affiliates have grown dramatically in reach, strength, combat power, and territory controlled. Most notably, the al Qaeda franchise in Iraq rebounded from near-defeat in 2011 to a force that now controls significant areas in Iraq while also operating in Syria. Bin Laden’s successor, Ayman al Zawahiri, continues to mediate between dueling al Qaeda franchises in Syria from his hideout in Pakistan. He’s certainly not too busy running from us to concern himself with such matters. Read more ..


Europe on Edge

Jewish Groups Concerned Over Far-Right Surge in European Union Parliamentary Elections

May 27th 2014

Golden Dawn - Greece

Jewish groups expressed concern on Monday over the surge in support for far-right parties in the European Union’s parliamentary elections, with fears that hate speech will now feature more prominently in European politics.

On Monday, the EU said that of the 751 seats, the center-right European People’s Party won 214, followed by the center-left Socialists and Democrats with 189, while the far-right parties surged to win a combined 36 seats, giving them enough weight to influence debate and decision making in the EU body.

France’s National Front won 25 seats, Hungary’s notorious Jobbik party won four seats, Greece’s Golden Dawn, under criminal investigation and with several party leaders in prison, entered the European Parliament for the first time, with an expected three seats, and the far-right FPÖ in Austria won four seats. Read more ..


The Edge of Terrorism

The Ideology of Militant Islamism in Southeastern Europe

May 26th 2014

Chechen jihadis

Since the fall of communism two and a half decades ago, militant Islamism has been planting seeds and spreading roots in various parts of southeastern Europe, particularly the former Yugoslavia. With the help of local allies, militant Islamists have established training bases, recruiting stations, and safe-havens for would-be terrorists and terrorists on the run. The extent of the problem became obvious when the late Richard Holbrooke noted that “if it had not been for the Dayton Peace Accords, 9/11 would probably have been planned in Bosnia, not in Afghanistan.” Indeed, almost every major terrorist action of the recent past has roots or connections to the Balkans.

Given the Balkans’ emergence as a new front for militant Islamists, understanding the ideology and beliefs driving the movement has become important for western security interests, and for the ramifications they may have on plans to integrate the region into Euro-Atlantic political and economic structures. Read more ..


Broken Bookselling

What You Need to Know About Amazon Bullying of Book Industry

May 25th 2014

Amazon box

The real economic story behind that lovely fight that’s going on between Amazon and Hachette that is. What we’re really seeing is a battle between the people who make the product and the people who distribute it as to who should be getting the economic surplus that the consumer is willing to hand over. Like all such fights it’s both brutal and petty. Amazon is apparently delaying shipment of Hachette produced books, insisting that some upcoming ones won’t be available and so on. Hachette is complaining very loudly about what Amazon is doing, entirely naturally. The bigger question is what should we do, if anything, about it? To which the answer is almost certainly let them fight it out and see who wins.

The detail of who is doing what to whom is well laid out in the WSJ here: In the wake of the federal government’s e-book antitrust pricing settlement with publishers, publishers supply e-books to retailers at a price set by the publishers but which retailers are able to discount.

Read more ..

The Iranian Threat

Misplaced Optimism Over Iran

May 24th 2014

Hassan Rowhani

When Hassan Rouhani was elected as Iran’s president in June 2013, you could hear the sighs of relief in Washington, in Brussels, at U.N. Headquarters, and across key European capitals. Finally, we were told, the terrorism-supporting, human rights-abusing, Holocaust-denying Mahmoud Ahmadinejad had left the political stage. Finally, a moderate, rational leader with whom we could conduct business was in power. Finally, there was a real chance of securing an enduring deal to thwart Iran’s dangerous nuclear ambitions.

Almost a year later, we’re still hearing that refrain, thanks to the optimism that the new round of talks on Iran’s nuclear capabilities, inaugurated by the Joint Plan of Action agreed by the Tehran regime and world powers last November, continues to generate. Iran’s own foreign minister, Mohammad Javad Zarif, has spoken warmly of the “unexpectedly fast pace of progress in the negotiations so far,” even offering the reassurance that his government is keen to avoid the perception that it is seeking to weaponize the nuclear program.

Read more ..

The Battle for Ukraine

The Costs Of Russia's Ukraine 'Victory'

May 22nd 2014

putin

Russia's aggressive policies in Ukraine since the fall of 2013 have resulted in some remarkable gains for Moscow.

Kyiv's European-integration plans have been derailed. The strategically important Crimean Peninsula has been annexed.

And the destabilization caused by pro-Russian separatists in eastern Ukraine threatens to continue casting doubt over the legitimacy of the government in Kyiv and to give Moscow strong tools for further interference in Ukrainian affairs.

But the costs of these tactical victories could be steep -- even unbearable -- for Russian President Vladimir Putin's government if the West is able to come together in its response and to keep up the pressure into the long term.

"Russia has damaged itself on many levels," Jan Techau, director of Carnegie Europe in Brussels, says. "There are only very few real partners and allies they still have left, and even the most hard-core defenders have now realized that Russia will probably never be the kind of partner that they thought Russia would be." Techau adds that Russia's international isolation as a result of Ukraine is likely to grow. Read more ..



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